Several sources of GAAP consulted by an auditor are in conflict as to the application of an accounting principle. Which of the following should the auditor consider the most authoritative?
A. AICPA Accounting Interpretations.
B. FASB Technical Bulletins.
C. AICPA Technical Practice Aids.
D. FASB Statements of Financial Accounting Concepts.
正解:B
質問 2:
The effect of a material transaction that is infrequent in occurrence but not unusual in nature should be presented separately as a component of income from continuing operations when the transaction results in a:
A. Option C
B. Option A
C. Option D
D. Option B
正解:B
質問 3:
FASB Interpretations of Statements of Financial Accounting Standards have the same authority as the FASB:
A. Emerging Issues Task Force Consensus.
B. Statements of Financial Accounting Standards.
C. Statements of Financial Accounting Concepts.
D. Technical Bulletins.
正解:B
質問 4:
According to the FASB conceptual framework, the quality of information that helps users increase the likelihood of correctly forecasting the outcome of past or present events is called:
A. Predictive value.
B. Reliability.
C. Representational faithfulness.
D. Feedback value.
正解:A
質問 5:
Arpco, Inc., a for-profit provider of healthcare services, recently purchased two smaller companies and is researching accounting issues arising from the two business combinations. Which of the following accounting pronouncements are the most authoritative?
A. AICPA Industry and Audit Guides.
B. FASB Statements of Financial Accounting Standards.
C. AICA Statements of Position.
D. FASB Statements of Financial Accounting Concepts.
正解:B
質問 6:
On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with Quo's president and outside accountants, made changes in accounting policies, corrected several errors dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List B represents the general accounting treatment required for these transactions. These treatments are:
* Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the accounting change or error correction in the 1993 financial statements, and do not restate the 1992 financial statements.
* Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust 1992 beginning retained earnings if the error or change affects a period prior to 1992.
* Prospective approach - Report 1993 and future financial statements on the new basis but do not restate 1992 financial statements.
Item to Be Answered
Quo manufactures heavy equipment to customer specifications on a contract basis. On the basis that it is preferable, accounting for these long-term contracts was switched from the completed-contract method to the percentage-of-completion method.
List B (Select one)
A. Prospective approach.
B. Cumulative effect approach.
C. Retroactive or retrospective restatement approach.
正解:C
質問 7:
Chester Corp. was a development stage enterprise from its inception on September 1, 1987 to December 31, 1988. The following information was taken from Chester's accounting records for the above period:
For the period September 1, 1987 to December 31, 1988, what amount should Chester report as net loss?
A. $150,000
B. $450,000
C. $ 50,000
D. $350,000
正解:B
質問 8:
According to the FASB's conceptual framework, the process of reporting an item in the financial statements of an entity is:
A. Allocation.
B. Recognition.
C. Realization.
D. Matching.
正解:B
Tokunaga -
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